The world’s largest free trade zone is forming between the European Union and Mercosur, with negotiations culminating in a comprehensive agreement after decades of talks.
Mercosur: South America’s Common Market
Mercosur (Spanish for Mercado Común del Sur – Common Market of the South) is an international economic organization established in 1991 through the Treaty of Asunción. The four full members of the bloc are Argentina, Brazil, Paraguay, and Uruguay. Bolivia, which formally joined Mercosur in July 2024, is still aligning its national laws with the South American organization’s standards, so it will not be covered by the EU agreement for now. Venezuela has been suspended as a member since 2016.
Decades of Negotiations
While relations between the parties began to take shape in the 1990s, official negotiations for an association agreement began at the end of the decade. After the EU Council approved the European Commission’s mandate to conduct talks, negotiations were initiated in 1999. The process encountered numerous obstacles, leading to its suspension in 2004 and resumption six years later. Negotiations gained momentum in 2016, with what then seemed to be the final version of the agreement reached in 2019 for trade and in 2020 for political matters. Opposition from the European Parliament and several member states prevented any breakthrough for a long time.
Recent Developments and Key Provisions
In 2023-2024, EU commissioners along with representatives from Mercosur introduced additional provisions to the agreement, including public procurement, a just transition fund, and sustainable development, including combating deforestation after 2030. The 2015 Paris Agreement has been established as a fundamental element in relations between the EU and Mercosur, ensuring the possibility of suspending the agreement if one party seriously violates the treaty or decides to withdraw from it.
